Rent Growth Trends: Insights for 2025 and Revenue Solutions
The supply growth and demand for multifamily rentals are going strong, but its believed that tides are about to change as per various reports.
How the Rent Growth has Been Affected?
The average multifamily rent fell by approximately $4 from November to December 2024 and it was down to $1742, as per the Yardi Matrix’s National Multifamily Report. The year-over-year rent growth saw a major downfall by dropping 10 basis points over the same period and bringing it down to 0.6%.
The year-over-year rent growth remained constant between 0% to 1% for the past 16 months, as per Yardi reports. The rent performance of Metro-Level areas has been mixed with high-supply metro areas seeing a negative rent growth throughout the entire year of 2024 while low-supply metros saw a moderate rent hike.
Austin, Texas, has the lowest year-over-year rent growth at -6%, which is surprising. According to reports, Raleigh, North Carolina, follows with -3.1%. In the east and secondary midwest markets have recorded the highest rent growth across the nation with New York taking the lead at 5.0% YOY.
YOY Rent Growth, November-December 2024
How Have Occupancy Rates Been Affected?
Occupancy rates held steady in November 2024 at 95%, according to Yardi Matrix reports. The national apartment market saw a record-breaking absorption of 404,000 new units out of 442,000 completed units.
These numbers represent a significant rise by historical standards. In the Midwest, unit absorption outpaced completions by 20%, while the Southwest region saw a contrasting trend, with completions exceeding absorption by 20%.
Single-family rentals, which enjoyed strong growth throughout 2024, also began to decline toward the end of the year. The average rent for single-family homes dropped $7 from November to December, bringing it down to $2,141. Additionally, year-over-year rent growth for single-family rentals fell by 40 basis points to -0.8%.
Amenify: Generating More Revenue with Seamless Service Integration
In a challenging rental market, innovative solutions can make all the difference in maximizing revenue. Amenify provides property managers and developers with a unique opportunity to boost income by integrating its premium services into lease agreements and ancillary income streams.
How Amenify Can Help You Generate Revenue:
Seamless Integration: Amenify's services—like professional cleaning, handyman, grocery delivery, and more—can be seamlessly bundled with lease agreements to offer residents added convenience while generating predictable income for property managers.
Improved Resident Retention: By offering value-added services, properties can stand out in competitive markets, encouraging tenants to renew leases and enhancing occupancy rates.
Revenue from Ancillary Services: With Amenify, property managers can earn a share of revenue from services provided to residents. This diversifies income streams beyond traditional rent collection.
Attractive for New Tenants: Amenify's offerings create a modern, service-oriented living experience that appeals to renters looking for convenience and lifestyle upgrades, making your property more desirable.
By integrating Amenify into your property, you can not only improve resident satisfaction but also unlock new avenues for growth in an evolving market.
FAQs
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The multifamily sector remains promising due to steady demand for rental housing, although rent growth and occupancy rates may stabilize in the near term.
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The market is experiencing mixed performance; high-supply metros face negative rent growth, while low-supply areas and Midwest markets are seeing moderate gains.
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Multifamily lending may tighten due to higher interest rates and economic uncertainty, but demand for financing in stabilized markets is expected to continue.
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It depends on the market; opportunities exist in low-supply regions with steady rent growth, but investors should account for interest rates and regional trends.
